Gold Price Forecast: XAU/USD eases below $4,400 as US yields rally
Gold (XAU/USD) shows moderate losses on Tuesday, weighed by higher US Treasury yields and a risk-averse sentiment, which has triggered a mild US Dollar recovery.
XAU/USD tumbles below $4,400 as US yields surge, reflecting risk-averse sentiment and a strengthening US Dollar. The precious metal slips just under the $4,400 level during early European trade, after failing to break above $4,430 but still staying within the weekly range above the $4,315 floor. The surge in US Treasury yields, hitting a one-year high above 4.7% for the 10-year yield and a 19-year high above 5.3% for the 30-year yield, adds pressure to Gold.
The Relative Strength Index (14) and Moving Average Convergence Divergence (MACD) indicators on the daily chart remain bullish, indicating further upside potential. The key resistance level is around $4,450, with the 200-day Simple Moving Average (SMA) at just above $4,500. A break below Friday's low at $4,317 could expose the August 6 low at $4,223 and a deeper base around the $4,000 level.
Gold, historically a store of value and safe-haven asset, is widely seen as a hedge against inflation and currency depreciation, held by central banks to bolster their currencies. Central banks purchased 1,136 tonnes of Gold worth around $70 billion in 2022, the highest yearly purchase since records began. High Gold reserves can enhance a country's perceived economic and currency strength.
Gold has an inverse relationship with the US Dollar and US Treasuries, both major reserve and safe-haven assets. When the Dollar weakens, Gold typically rises, providing investors and central banks with asset diversification options.
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